Being Social

Thursday, August 4, 2011

He’s out of bullets. He’s out of arrows. He’s looking for stones on the seashore. … There’s nothing left in the cupboard. He did a huge Keynesian gamble, and it failed.

Keynes has never pulled the US from any recession. Never.

Keynesian Theory has lengthened 3 depressions. The first was the Great Depression, of course depressions aren't called depressions anymore. The current contraction in the US is referred to as the Great Recession while the other in Japan was called the 10 Year Recession but is now referred to as the more illuminating 20 Year Recession, as for 20 years Japan has seemed mired in a seemingly endless economic nightmare of stimulus spending from which the nation has been unable to awake.

What do the Great Depression, The Great Recession, and the 20 Year Recession have in common? The answer is that they have all employed the Keynesian gamble that is Keynesian Theory and failed.

Thieving from the future, while comforting today, yields a diminished tomorrow.

In the case of Japan that tomorrow came within a single economic contraction. Even now Japan continuous the feel good Keynesian stimulus that has resulted not in boom, but a full generation of economic stagnancy. In Japan we see firsthand the real loss that was transferred to the unborn when Japanese leaders chose Keynesian solutions.

Those unborn are now young adults enduring the fiscal abuse metered out by elders who gambled on Keynesian solutions and failed.